MNI China Press Digest, July 31: Politburo, Economy, Property, Multilateralism

The following lists highlights from Chinese press reports on Friday:

China's top decision-making body, the Politburo, stopped short of mentioning cuts to banks' RRRs, interest rates and refinancing in the statement following its Thursday meeting, a departure from the statement following the last meeting in April, the China Business News reported. The statement did, however, continue to emphasize a flexible monetary policy. Should the economy recover well, early-phase stimulus policies may be removed more quickly but they could be ramped up again should the recovery fail to meet expectations, the newspaper said citing Dong Ximiao, a researcher at XWBank.

China is mostly immune from the global downturn caused by the pandemic as only about 5% of its economy is exposed to external turbulence through the trading of goods, the People's Daily reported citing Li Daokui, a former monetary policy advisor to the People's Bank of China. China should continue to tap into its huge and growing middleclass and not be distracted by the short-term uncertainties posed by the U.S., Li said according to the Daily. Efforts to boost spending on automobiles, tourism and dining should be made in H2 to help drive sluggish consumption, Li said.

Balancing property prices and the tightening of the funds flow will be the top priorities in H2 as regulators take further steps to prevent asset bubbles and inflationary pressure through restricting illegal funds from moving into the stock and real estate markets, the Economic Information Daily reported. Policies such as boosting housing supplies while continuing to limit asset purchases and credit will be crucial, the Daily said, citing its previous interview with Sheng Songcheng, an advisor to the Shanghai government and a former PBOC official.

China is working with the EU and Japan to save multilateralism, the official English-language China Daily said in a commentary on Friday. Both China and the EU recognized the progress in the bilateral investment agreement negotiations, particularly on the issue of fair competition, and promised to continuously strengthen supervision and accelerate discussions on the remaining issues to complete the negotiations within the year. China and Japan both displayed a keen interest in pushing the signing of RCEP, which will eliminate trade barriers between member countries and promote new labour and supply chains between China and ASEAN, the Daily said.